Friday, March 26, 2010

‘Green Fund’ for climate change proposed by IMF staff

By Sandrine Rastello and Ben Sills

March 25 (Bloomberg) -- A “Green Fund” designed to help nations meet climate-change pledges would sell bonds in global markets and use the proceeds to help poor countries deal with the effects of global warming, International Monetary Fund staff proposed in a report.

The report released today expands upon an idea mentioned by IMF Managing Director Dominique Strauss-Kahn earlier this month as a way to raise $100 billion a year by 2020.

The plan offers a mechanism for rich nations to honor their agreement from last year’s Copenhagen climate summit to provide that amount of money to developing countries to confront drought, flooding, food shortages and disease exacerbated by global warming.

Governments could inject reserve assets in the fund, including those disbursed by the IMF last year, it said. The IMF staff plan also calls for wealthy nations to provide separate subsidies to help finance grants, according to the report.

“Once created, the Green Fund could provide a unified resource mobilization framework capable of meeting the financing needs identified at Copenhagen for decades to come,” the IMF staff paper said. “This seems far preferable to the alternative -- a succession of difficult international negotiations every few years, with uncertain outcomes.” …

‘Green Fund’ for Climate Change Proposed by IMF Staff

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